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INTERNATIONAL ACQUISITION ANALYSIS

How much an international acquisition can influence in the acquired organization’s

performance and culture? Integration of strategic and organization perspectives: a case

study of Alstom Grid transition towards acquisition periods.

A DISSERTATION

Submitted to

In partial fulfillment of the requirements for the degree of

MASTER OF PROJECT MANAGEMENT

2015

i


Acknowledgment

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Abstract

The dissertation involves the analysis of culture performance and differences of influenced by

organizations that have experienced. The conducting of the dissertation involves one of the

leading energy organizations, particularly the Gas Insulated Switchgear manufacturing facility in

Switzerland, Alstom Grid GmbH, which has overtaken and resurged from successful several

merging and acquisitions processes in the past 40 years. A comprehensive review of literature

associate to the influence aspects of mergers and acquisitions is conducted. The elements which

result into how economic, social and politic factors weight the cultural differences within the

organization are taken into consideration. The dissertation also describes the main identified

cultural differences which results in the merging and acquisitions to become successful or

failure. Cultural evaluation, management and leadership performance analysis, cultural

integration analysis and their benefit towards the accomplished mergers and acquisitions are also

conducted specifically focused in Alstom past history in the dissertation. The evaluation of the

dissertation is also assured by the applied methodologies in which includes the conduction of

research design and approaches. The findings of the dissertation are explained in details to

ensure a clear understand of how important organizational and national cultural differences

influence in the process of establishing a merging and acquisition. Lastly, the conclusion and

recommendations develop the knowledge and enable the improvement of merger and acquisition

process in others international organizations.

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Table of Contents

Acknowledgement..........................................................................................................................iii

Abstract............................................................................................................................................v

Table of Contents............................................................................................................................vi

List of Figures..............................................................................................................................viii

List of Tables..................................................................................................................................ix

Chapter 1..........................................................................................................................................1

Introduction......................................................................................................................................1

1.1 Background..........................................................................................................................1

1.2 Research Aims.....................................................................................................................4

1.3 Research Questions..............................................................................................................4

1.4 Research Objectives:...........................................................................................................4

1.5 Justification of the Topic.....................................................................................................5

Chapter 2..........................................................................................................................................6

Literature Review............................................................................................................................6

2.1 Introduction..........................................................................................................................6

2.2 XXXXX...............................................................................................................................6

2.2.1 XXXXX...............................................................................................................................7

2.2.2 XXXXX...............................................................................................................................9

2.2.3 XXXXX.............................................................................................................................12

2.3 XXXXX.............................................................................................................................14

2.4 XXXXX.............................................................................................................................19

2.5 Summary............................................................................................................................24

Chapter 3........................................................................................................................................27

Research Methodology..................................................................................................................27

3.1 Introduction........................................................................................................................27

3.2 Research Method and Design............................................................................................27

3.3 Participants........................................................................................................................29

3.4 Materials/Instruments........................................................................................................30

3.5 Data Collection, Processing and Analysis.........................................................................33

3.6 Ethical Assurances.............................................................................................................35

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3.7 Summary............................................................................................................................36

Chapter 4........................................................................................................................................37

Presentation of Results..................................................................................................................37

4.1 Introduction........................................................................................................................37

4.2 Survey Outcomes...............................................................................................................37

4.2.1 Participant background......................................................................................................38

4.2.1.1 XXXXX.............................................................................................................................38

4.2.1.2 XXXXX.............................................................................................................................41

4.2.1.3 XXXXX.............................................................................................................................41

4.2.2 XXXXX.............................................................................................................................43

4.2.2.1 XXXXX.............................................................................................................................44

4.2.2.2 XXXXX.............................................................................................................................45

4.2.2.3 XXXXX.............................................................................................................................45

4.3 Conclusion.........................................................................................................................45

Chapter 5........................................................................................................................................47

Analysis of Data............................................................................................................................47

5.1 Introduction........................................................................................................................47

5.4.1 Data analysis......................................................................................................................47

5.2.1 XXXXX.............................................................................................................................47

5.2.2 XXXXX.............................................................................................................................49

5.2.2.1 XXXXX.............................................................................................................................49

5.2.2.2 XXXXX.............................................................................................................................53

5.2.2.3 XXXXX.............................................................................................................................56

5.2 XXXXX.............................................................................................................................59

5.3 Discussion of the research questions.................................................................................62

5.3.1 XXXXX.............................................................................................................................63

5.3.2 XXXXX.............................................................................................................................65

5.3.3 XXXXX.............................................................................................................................68

5.3.4 XXXXX.............................................................................................................................69

5.4 Conclusion.........................................................................................................................70

Chapter 6........................................................................................................................................72

Conclusions and Recommendations..............................................................................................72

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6.1 Introduction........................................................................................................................72

6.2 Research summary of key findings....................................................................................72

6.3 Practical Implications........................................................................................................74

6.4 Limitations of the research................................................................................................75

6.5 Scope for future research...................................................................................................76

6.6 Summary............................................................................................................................77

7 References..........................................................................................................................78

8 Appendices........................................................................................................................87

Appendix I - Survey questionnaire................................................................................................87

Appendix II – Interview questions................................................................................................94

Appendix III – XXXXX................................................................................................................97

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List of Figures

List of Tables

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viii


Chapter One

Introduction

1.1 Background

The understanding of human behavior is a continuously focus of study that expands every year.

Human beings are subjected to react at different manners towards a change in his/her ritual of

day to day actions. Either at personal or in professional life, changes are subjected to reactions

that might become beneficial or detrimental to others and within an organization environment. In

the real economic situation, competition brings organizations to new strategic definitions to

expand that are resulted in acquisition or merging (Rottig, 2007). Towards the changes in

strategic, political and economic views within an organization, integration of culture, either

being within ways the business run or different national cultures requires an perceptive study and

understanding of barriers countered and what best practices could be engaged. The order to

support future organizations as done by previous researches has not examined the relationship of

cultural differences and tasks integration with sufficient frequency (Stahl & Voigt, 2008).

Alstom Grid Switzerland has a history of acquisitions in the past with similar national and

organization culture where an acquired organization with a complete different culture may

prompt to bring drastic changes in culture. The present situation within Alstom, under being

acquired by a different organization with different organizational and national culture has

become a worry due to expected changes in the way of running business, processes and

functions.

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Employees and customer are under the stressed expectance of changes that might become

beneficial to some but at same time developed contrary behavior affecting business. According

to Finkelstein (2009), “Merger and Acquisitions are associated to high degree of stress and

uncertainty for the individuals affected by them, especially those of the target organisation”.

Attention has been brought under the investigation within colleagues inside the project

management department and expanded attention in further analysis the previous acquired and

management performances that stabilize the changes during that period. The development of

interview with the employees that felt the changes in the past experience and questionnaires with

those non acquired experience employees will lead the analysis and a formation of guideline with

management best practices to maintain order and flow of the actual transition. At same time the

information will contribute to bring attention of management of how much expectance

employees wait to contribute inside the corporate atmosphere.

1.2 Aim

The aim of this dissertation is to review and carry out a study of how acquired organizations are

influenced by acquiring companies that result in their performance and culture behavior

improvement and imperfection before and after acquisition takes place. Integration is the main

important phase which requires strategic and organizational conditioning factors that includes the

culture acceptance and best management practices. Geiger (2010) described that many factors

can influence and improve the implementation and cultural integration. The organization of an

early process plan, setting and communication of clear goals, arrangement of management with

appropriate incentives to define the areas that can be achieved, keeping appropriate information

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between employees and customer, applying a quickly integration system with a sensitive culture

change are many of these important factor.

The case will be most focused on the past and present experiences within different departments

in Alstom Grid Switzerland, and the old and future acquisitions that influence the present

organization. It also comes to investigate, through secondary approach, others organizations that

have experienced similar situation.

1.3 Research Question

The creation of a research objective in a dissertation is supported by the creation of questions

and evaluation of its feasibility. The main research question that will be explored in this

dissertation is:

How much an international acquisition can influence the acquired organization’s performance

and culture?

1.4 The Research Objectives

In order to conduct the study, research objectives should be considered as they determine the

kind of questions, data collection and analysis procedure and design of the propose study. The

objective of this research is to follow the investigation based on the below statements:

To identify the organization culture and national culture, the differences and

importance each ones is considered (Gerhart, 2009).

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To identify the past and expected behavior of cross cultural alienation before and

after acquisition and the impact that might affect the organizations performance

(Coisne, 2014).

To assess the role of management and performance management practices in context

of acquainted company.

To describe the challenges of integration of new culture, formulation of a common

vision, build trust and communicate information.

To recommend effective strategy to execute the most effective model of

organizational culture and the participation of management towards cultural-related

processes (Latta, 2009).

1.5 Research Feasibility

Feasibility study has as a goal to perceive the intending meaning of suitable concept even the

required study is right or not. For that reason, available sources about the chosen topic will be

investigated, primary sources related to the research topic will be identified and appropriate

methodology will be defined accordingly. Within the interest of Alstom Grid, this research study

brings share of experience, recommendations and values of how employees, managers and

clients behave during the acquisition/merging processes. Appropriate sources of evidence of

acquisition/merging organizations are also available within the internet, university library,

academic journals and books. Alstom Grid in Switzerland has also agreed to contribute with the

research by making available access to the data sourcing to obtain the needed material and

propose questionnaires and surveys to support the qualitative part of the study. The available

materials would allow the preparation of a meta-analysis of existing studies related to the

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organizational performance and culture behavior and would support the study by providing

quantitative resources. The access of all resources would be eligible to perform the research and

finalize the work in 9 months period. In overall, the study would provide other organizations in

the same situation and also Alstom to appropriately adapt to the expected circumstances that

might happen in future.

1.6 Justification of the Topic

Within many years of operation, Alstom Grid became a respected engineering organization

delivering and supporting the energy business by providing know how and supplying

transformers, switchgears and other electrical components. The achievement of success in the

factory in Switzerland originated from different merging and acquisition with similar national

and organizational cultures. Switzerland as a triple culture country of Italian, German and

French, did react well in past acquisition with French organizations. However, the present

change is coming towards an unknown culture, American, which will come to happen in the next

months. As a member of family in Alstom Grid in Switzerland, the understand of past

acquisitions and the characteristics that headed to a successful implementation became focus of

interested as well by many other employers that will come to react differentially in this unknown

new journey.

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Chapter Two

Literature Review

2.1 Introduction

Within this section, the readers will get to understand the way the dissertation topic has been

selected. This chapter is based on existing available researching material and experience within

departments in Alstom Grid towards historic acquisitions. With many critical factors preventing

organizations to achieve success; competition is considered as one of the most complex, which

requires the need to create new strategic directives with the aim to achieve a greater return of

investment (ROI). Some common ways to achieve a market share is to see beyond the existing

potential and expand geographically through joint venture, merging and acquisition (M&A). The

literature review cover the industry type influence in acquisition performance, factors that affect

the mergers and acquisitions, differences of national and organizational cultures and their

implications and consequences, role of management of acquiring company to enhance the

performance, human resource aspects, and benefits of supportive structure for successful

mergers and acquisitions.

2.2 Industry type influence acquisition performance

Acquisition of a company by another company is most often done inter-industry and most often

it is part of the core strategic alliance or complementing the internal resource capability of the

firm. The companies which mull the acquisition, so because they have either become stagnant in

growth or see an opportunity in a creative, fledgling or ailing organization which will impart

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them the boost in lieu of the monetary returns (Healy et al., 1992). It has not been hitherto seen

that merger and acquisition been taken place outside one’s core or peripheral offerings.

However, this possibility cannot be totally discarded as many firms are coming out of the

reservation and are trying to expand their product offerings by just acquiring the companies

operating in the industry which they want to enter into.

Merging and acquisition (M&A) of an organization as studied by Yaghoubi et al. (2014), shows

that a huge impact of the success performance of the acquirer companies are related to the

industry type. Since merger and acquisitions in any industry distort the entire market space of the

industry irrespective of the number of players, it has been seen that in an industry which is

governed by few players, mergers are mostly successful because they are able to transform the

competitive scenario of the industry because of influence on the small number of players (Laabs,

2009). This can be positive feature for the company if it works in the oligopoly market where

there is less number of players in market.

Industries which are fragmented do not see much change in the competitive landscape, and thus

the merger does not provide much boost to either of the players. This can be very challenging if

both the companies complement each other’s core competencies, and thus the resulting entity has

a much larger hold and control over the offerings in that particular industry. In the 90’s merging

and acquisitions were used as a mechanism for consolidating firms in the fragmented industry,

especially in the new industries and business services using different techniques which were

differed in term of players, motivations, strategy for growing the acquired business and exit the

route (Sundarsanam, 2003).

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Another factor is the extent of creativity required in the industry. The industries like telecom,

fashion and entertainment are governed by idea generation and innovation while industries which

are stable like education, manufacturing, banking and hospitality are governed by regulations and

efficiency. The industries which rely on innovation are seen to be much successful with mergers

as they gain large resource pool of information as well talent (UNC, 2011). However, industries

that are driven by their internal efficiency do not gain much by mergers as they are disrupted and

fail to adapt to each other’s way of working. The union in between Daimler-Benz and Chrysler

in 1998 as an example can be considered the greatest of all global mergers that resulted in cross

cultural clash (Laabs, 1998). Many social variances and administrative culture proved the

unsuccessful conglomerate that first emphasized, ethnic issues just cannot be overlooked on an

international level, particularly not within mergers. Daimler was a “traditional, well-organized

and innocuous” German company, while Chrysler was known as “bold, varied and innovative”.

The energy industry is also considered complex and have specific characteristics applied for

every country that are considered under the influence of political, financial and social factors

which are broadly explored as individual contexts. The acquisition or merging of this specificity

seems to be focused on general purposes and does not specify clearly. Hypothesis tested by

Mantravadi & Reddy (2008) in the electrical equipment sector which was the closest compared

to the energy sector has been identified and concluded by using pre and post operation and

performance ratios that industry type does seem to make difference to post merger operating

performance of acquiring firms.

2.3 Identification factors that influence in merging and acquisitions

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Integration is considered as the most important phase involving strategic and organizational

factors that includes the culture acceptance and best management practices. As part of the

research, research materials have been examined and evaluated to understand the theories related

to cultural challenges, differences, and proposed solutions. From many years, organizations are

seen to adopt the strategy of merging or acquiring new organizations by forgetting to adopt the

cultural concept to integrate the organizational and national cultural difference that results in

high failure rates of mergers and acquisitions (Hajro, 2015). The lack of leadership management

is also considered as an impact in the goal achievement and satisfaction of employees and

redirection to a supportive acquisition flowing action. Chatterjee et al. (1992), Datta (1991),

Kavanagh & Ashkanasy (2006), and Ollie (1990) all cited by Cooper and Finkelstein (2013),

have looked deeply behind the triggering factors for problems and about this that what could be

performed to mitigate such situations. Additionally it is also crucial to assess national and

organizational culture, management performance and measurement of state level of both

organizations.

According to DiGeorgio (2002), the change in culture is always difficult and can take seven to

ten years, but combined, can afford a unique opportunity to take culture and impact performance

to another level. The identified best practice model proposed by DiGeorgio (2002), and tested by

organizations such as Cisco System and GE Capital, center the systematic approach by

identifying cultural fit, structuring the integration team, leadership selection and integration

issues. These factors are vital such as the cultural fit and leadership selection as the culture of the

organization may differ from other organization and in the merging or acquisition if the both

companies leadership approach are same, organizational structure are same that it will lead to a

successful merging or acquisition.

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Figure 1 - A systems approach to successful mergers and acquisitions (DiGeorgio, 2002).

The figure 1 shows the keys to front end success and keys to integration success. The openness

to dialogue refers to open communication with transparency that can resolve the various issues

before merging. The time, resources and tools must be judiciously used to select the right target

for merging and acquisitions. The transition structure should be based on type of combination

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that can support the merging and acquisition process. For integration of acquired company it is

recommended to select the new leaders that follow the company principles and practice a

common philosophy of working. There should be communication channels that can streamline

the process of merging and acquisitions. Strategies should be devised to retain the existing

customers of both companies. The people issues of both companies should be successfully

managed by adopting the collaboration strategies to achieve a successful integration.

2.4 Organizational and national cultural differences

Merging & acquisitions not only leads to merger of business processes but also human resources

and their sensibilities which are governed by transitional culture, individual values, ethics and

sometimes national differences. National cultures were regarded as main source of work culture

differences among various countries by previous theorists like Hofstede (1980) who defined five

parameters which form the basis of the attributes of a work culture of any country. These,

however lost their relevance in the new business scenario where national cultures themselves are

getting diluted and it is no longer possible to define a certain organizational culture only on the

basis of its home country. Thus, it is imperative to see that economic influences along with the

national attributes are drivers of forming the cultural basis for the work ethics and standards

across the world (Hsu et al., 2013).

Hofstede’s (1980) dimensions of analyzing a culture and individuals who belong to a particular

culture are at the verge of obsolesce as they are based on a view that cultural aspects of an

individual are water tight compartments which are uniform and static for a very long time. This

is not true in current business world. There are several variables that comprise of culture and

these variables are liable to change as and when economic scenario in the country changes.

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Organizations which need to explore territories that are unexplored are bound to have a

tremendous influence when they establish oversees branch or production center. Similarly

expatriates that go for taking care of the offshore office would bring back many factors that will

dilute the rigid culture that is based on both economic and national features. To identify and

mould the work culture according to the ever changing cultural variables is one of the most

insurmountable challenges that confront the managers in contemporary business world. More

than the technical core competencies, what will define a successful organization is the ability of

its top management to induct and imbibe the changes done by the various national and cultures to

its native culture (De Jong, 2008).

Initially, it is determined to examine the organizational culture and national culture, and the

differences and importance of each one. According to the arguments by many authors (Buono &

Bowditch, 1989; Cartwright, 1997; Krug & Nigh, 2001 cited in Hajro, 2015 and Mendenhall &

Stahl, 2005), the organizational and national culture differences have been considered as the

main source of hostility and distrust between organizations. Therefore, the result of post-merger

integration process has remained ambiguous with negative association with merging and

acquisition outcomes or as a source of value creation in cross border merging and acquisitions.

A research carried out by Hajro (2015) analyzed how cultural differences of organizations affect

the integration process and what other factors facilitate or hinder successful socio-cultural

integration in merging and acquisitions. This research was based on longitudinal case study

during four different points of time: immediately before the acquisition and during negotiation

talks, and during the first, third and six year after the acquisition between German and Austrian

energy organizations. The use of qualitative analysis during the four different points of time and

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through theoretical analysis on socio-cultural integration process and national/ organizational

cultural differences resulted in a development model to merge social cultural integration process.

The study additionally came to a proposal outcome of strong influence on mediate variable in

interpersonal relationships, trust and shared identity through significant occurrences of critical

incidents resulting in a closer cross cultural interaction under the surveillance of a proper

international human resource management. This confirms that cultural differences by some

people are considered as a source of friction and conflicts however can be considered a source of

enrichment and progress and more as a mean of cross-fertilization and innovation by selecting

the best practices (Emerson, 2001).

2.5 Management role and performance management practices in context of acquainted company

The relation between national and organizational culture and between organizational culture and

organization performance becomes a point of interest for another investigation. Many failures

involving merging and acquisitions are related to the lack of national effort to assess cultural

compatibility of fit prior to engagement of the firms, different types of managerial styles and

complexity to implement changes initiatives, causing negative effect to its performance. The

need to understand the culture diversity between countries and also between the organizations is

dominant factor to avoid problems and support change.

Yussuf et al. (2008) stated that “influence of organizational culture on company performance”

tended to analyze the cultural diversity based on four cultural dimensions. This is the early

framework by Hofstede (1980) who proposed: individualism, uncertainty avoidance, power

distance and masculinity, between organizations in different countries. He provided valuable

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information for organizations for formulation of a strategic direction and decision. The paper

confirms the analysis carried out by Hofstede (2010) with the indication that cultural constraints

determine the feasibility of strategy and supports the identification of potential areas of culture

conflicts. Further the cultural distance in mergers and acquisition suggests that these are barrier

to the knowledge flow and evidences suggest that congruence can be accomplished by

achievement of complementarity and there is no necessary need of achieving similarity for

cultural distance (Haspeslagh & Jemison, 1991). Power distance can bring the role ambiguity

(Shenkar & Zeira, 1992).

The individualist and collectivist values refer that individuals are motivated by the personal goals

and support competitiveness while the collectivists are motivated by group goals and interests. It

is revealed that members of individualistic society show have weak bonding with the alliance

partners and they are less likely to give up their control in relationship (Delerue & Simon, 2009).

This provides an insight when a corporate culture has the collectivism approach and acquires a

firm that has an individualism national culture. The analysis reveals that American company and

Switzerland Company has the similar individualistic culture as proved by the Hofstede research.

(Hofstede, 2001).

Power distance refers that where the power distance is high, subordinated may not ask questions

from senior managers but where the power distance is low people can perceive that they are

more equal at work place. It is also important to notice that the power distance refers a degree

according to which a person accepts inequality as fair and normal that may not be perceived by

other person having low power distance in culture. It shows that the American culture and

Switzerland culture has low power distance and people work with equal opportunity so forming

an alliance with the American company cannot be difficult by the acquirer company.

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The next factor uncertainty avoidance refers that society attitude and tolerance towards

uncertainty and ambiguity. It the uncertainty avoidance is high in the society than people will not

be willing to change their existing pattern of thinking and working norms. The low uncertainty

index shows the willingness of society to take risks and unstructured new situations. American

culture show generally the low risk index and they may be willing to adopt the changes proposed

by Acquirer Company.

Cultural integration

It is necessary to have a cultural integration between both companies involved in merging or

acquisition proceeds. It has been identified that cultural integration can help to remove the

cultural differences (Zhu, & Huang, 2007). The cross cultural change management considers the

new pattern of system to solve conflicts and converts antagonistic feelings of employees towards

positive feelings of support to each other and achieves the cultural synergy. It respects the core

cultural beliefs of each company involved in mergers or acquisition and acknowledges the

importance of communication and change management adaptability.

It is found that the national culture compatible post strategy of acquisition can significantly

improve the performance of employees after the post-acquisition (Morosini & Singh, 1994). For

solving the cross cultural differences, four models are suggested (Zhu & Huang, 2007). These

models refer that the company must adopt localization model, transplanting culture of parenting

company model, cultural innovation by integration model, and fourth model is evasion tactics.

All these models can be used in different circumstances. The first model localization allows the

subsidiary company to make its own strategy and decisions according to local circumstances and

conditions. The second model of cross cultural integration transplants the parent company

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culture through strong supervision of the target company. The third model is cultural innovation

and here both companies develop a new culture for working together. The fourth model suggests

that company must use evasion tactics model if there is huge cultural gaps between the acquirer

and the target company. This model is generally suitable during the transition period.

In the latest paper written by Hajro (2015), “cultural influences and the mediating role of socio-

cultural integration processes on the performance of cross-border mergers and acquisitions”

presents information that national culture still influences the organizational culture and

statistically demonstrates socio cultural environment relation with the work culture of each

specific organization. The research method was based through a Model of Culture fit, the

influence of internal work culture on human resource management practices showing

quantitative statistical relationship result with a significant malleability prediction of supervision

and control that shape the dimension of human resources practices. The direction of changes in

the behavior of employment are influenced by management impact and leadership style that

results in self-motivation of employees to achieve goal setting practices, empowerment practices

and opportunity to self-control.

Managers and top management professionals at the merged companies face a daunting task to

consolidate the aspects of business by eliminating, generating or merging the various task as well

as functional duties of the respective departments. Employees are at the heart of every process

that takes place after the merger and this means that managers need to deal with a lot of

communication as well as query resolutions. Most managers have a full-fledged plan for taking

on the questions and concerns of the employees and this is done by making a platform where in

the concerns of the functional departments are met and resolved. This can be done by offline

platforms like presentation, query resolution cell or department or online methods like separate

16


portal for various stakeholders and their questions being lined up as FAQs. The management

needs to chalk out a plan which is in line with the core corporate strategy as well the major

objectives of the mergers (Rouse & Frame, 2009).

Few months following the merger are the toughest challenge with respect to strategizing the job

responsibilities, roles and accountabilities. Also, since there are duplication of several duties and

designations, some of the restructuring is mandatory which means bad news for several

employees. This leads to low employee morale across the new entity after the merger. Most

employees are in the constant state of confusion and panic which should be handled very

effectively failing which the merger might not see though the real goals set in the first place

(Bandyopadhyay, 2010)

The following points elucidate the steps to be followed by the change management managers or

other change management diagnosis professionals in order to streamline and make the merger

absorption smooth.

1. Study the organizational structure: The first factor which is imperative to transform the

basic fabric or structure of the company is: building a clear structure collaboratively which

means that process of the transformation need to be broken down the into specific, clearly

defining initiatives which start from measuring a corporation’s current condition thoroughly,

classifying the present state of business competences and complications, and clearly classifying

the fundamental thought processes that are required to change in order to be successful on the

goals of transformations (Jorgensen et al, 2012).

2. Engage the employees: The second factor which is important is engagement of the employees

substantiated by the fact that when employees feel a sense of ownership, the results show a 70

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percent success rate for transformations and when they take the initiative to drive change,

transformations have a 71 percent success rate with 79 percent success rate by combining both

the criteria (Jorgensen et al, 2012).

3. Evaluate leadership capabilities: The third factor driving a successful transformation is

leadership and capabilities supported by the result that nearly 83 % of the companies built

competences, changed mind-sets or culture, or developed ability for incessant development in

order to make a transformational shift. Also, leadership aptitude appears to be important in

cultivating long-term wellbeing of the company as said by 63% of executives and the companies

which did not focus much on leadership while bringing about change were successful in

transforming only short-term performance (Jorgensen et al, 2012).

4. Identify positive points: The fourth factor contributing towards the successful transformation

is to emphasize the positive which means that the establishments tends to be more effective in

motivating the transformation when reasons for change are discussed and the change is

celebrated than when communications focus exclusively on causes for transformation.

Concentrating on the positive points timely in the procedure throughout the evaluation of a

business’s present situation also has a positive correlation with the successful transformation

(Jorgensen et al, 2012).

2.6 Human resource aspects towards implementation phase

The study of the impact of organizational culture on leading change done by Latta (2009) came

to examine other human resource aspects in relation to how the organizational culture reacts

when a change implementation process is implemented. The author also examined how leader’s

knowledge of organization culture affects the process of implementation change process in

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different ways and identifies the stages towards the implementation. Some of the human

resources aspects such as resistance to change and failure to adapt to an organization culture that

are not covered by Yusuf et al. (2005) have been considered and it presents culture as a moderate

variable that acts respectively to the implementation of change.

The model developed by the Latta (2009), Organizational Change in Cultural Context (OC3

Model) advances theoretical perspectives reflected in the critical stages during the process of

change implementation. Additionally the model “could be used to foster a continuously

expanding awareness of organizational life and increase consciousness of factors outside a

leader’s limited frame of reference that influence the course of change”. The understand is that

organizational culture exerts differential influence and provides a road map charting the points in

the process of implementation change where consideration of the impact of organizational

culture contributes towards effective leadership.

According to Schuler & Jackson (2001), the management of human side of change is considered

the primary indicator and real key of the success or failure of a merging and acquisition deal

which during evaluation the identified threads are most encounter during the combination –

implementation stage. The merger deal depends on equal or unequal type of organizations in

which from both sides put pressure on the cultural and work ethics of the employees. Ideal ways

to communicate is to speak directly and clearly about the issue at hand face to face with the

person involved and getting a message across by artfully speaking indirectly and hinting at the

issue. Being too direct is clumsy, as a result a go-between or middleman is often used with

delicate or important matters. Verbal communication is the dominant mode, although body

language is also relied upon to a certain degree. Words are not to be trusted as much as mutual

feelings and non-verbal cues.

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After the merger and acquisition has been absorbed by both the companies, Human Resource

comes into picture for the real role. The role is basically to make employees of both the sides feel

at home with each other and see that no one feels out of place or out of context. The following

are few of the activities that Human Resource needs to follow in order to make sure that the

employees of the merged companies get to know each other better and find space for each

other’s ideologies and well as cultural affiliations (Schuler & Jackson, 2001).

Friendship programs: The companies that are merged should follow some plans like

staff should pay a visit and mingle with the local offices and get to know the office culture.

Regular Business trips: Senior managers should visit the other country in order to know

the culture and nuances of working in the respective countries.

Communication, trust and mentoring: The merged companies should ensure

continuous mentoring by supervisors and a good communication plan which is implemented

routinely leading to firm trust between higher management and employees. A free flow of

thoughts should be encourages in order to facilitate problem solving and decision making at mid

and lower management.

Workplace flexibility: It is imperative that workplace should not be rigid and

individuality of each employee is respected and values. The merged companies should provide

flexible–policies pertaining to work-life balance. Continuous employee engagement plans should

be implemented and environment should be as comfortable as the employee’s home country

because the engagement will translate progressively into retention, hence employee faithfulness

for a long tenure.

2.7 Supportive structured faced by organizations towards merging and acquisition

20


The study of Hofstede (1980) presents the information that in cross cultural context the risks,

cost and difficulties are multiplied between organizations. The studied was performed with

collective material in more than 40 countries, contributing in the areas of cultural definition and

mapping theory building becoming a significant systematic review tool and empirical

comparison of work area during that time. The study of Data and Puia (1990) presents that

cultural distance in terms of different management thinking and work related values poses a

significant impact on the organization. The degree of relatedness is most important that

determines the level in integration and degree of change between acquired and acquirer

companies.

The report conducted by Morosoni et al. (1998) presents information that the possibility of

relatedness between firms, post-acquisition strategy of firm, impact of sizes between acquired

and acquiring company, uncertainty avoidance factor in companies, and differences in industry

between them are important variables to consider for understanding the impact of culture in

merger and acquisition. On the other hand, Silvia & Simona (2013) present information that in

the acquisition, factors such as architecture of building, dresses of staff, behaviors and habits of

people, employees, behavior in conflicting situations, role fulfillment ways, and working

environment are important to determine the influence of culture. These both papers, support

structures for understanding the situations organizations come to face during merging and

acquisitions and outline the positive and negative impact of cultures. Additionally supportive or

hindrance elements towards the impact, offers the process collaboration between acquired and

acquiring firms’ management people and for change management to enhance productivity of

both firms. The main question is to understand the role of culture in shaping the performance of

people of both organizations after acquisition.

21


The following steps describe the formation of a supportive structure after merger and acquisition:

1. Entry (Problem identification): During this stage, the top management of the firm realizes

that there are certain loopholes and need for the change. The top management rope in the

consultant and he recognizes certain parameters in the organization to initiate the change process

which include relating with the client, motivation of client, readiness for change resources

available, and potential leverage points (Leifer, 1989).

2. Contracting: The consultant carefully researches the firm and assesses the parameters

mentioned above, he has his own normative approaches to initiate the change process. The

consultant makes assumptions and formulates the framework to start the process of change.

3. Diagnosis: This stage involves collection of facts and figures to conduct research about the

status quo of the operation, organizational structure and various other parameters which should

be changes in order to bring in change. It also involves drawing the trends and pattern by

analyzing the data which is collected (Leifer, 1989).

4. Feedback: After the brainstorming session with the team about the results of the analysis of

the data the collaborative study is undertaken with the top management of the organization to

diagnose the underlying problems and the evident symptoms (Leifer, 1989).

5. Planning Change: The top management and the consultant usually work collaboratively to

take specific action which is made after the directional road map is made based upon the study

carried on the culture, technology and environment of the organization (Leifer, 1989).

6. Intervention: This stage deals with the actual implementation of the change process which

has been done on paper and involves the collaboration, communication and cooperation from all

22


quarters of the organization. It includes installation of new methods, reorganization of structures

and work designs, and reinforcing new conducts (Burke & Litwin, 1992).

7. Evaluation: This stage involves evaluating the process of change implementation which

involves collection of data after the organization has embraced change and the change is seen in

everyday activities and conducts. Because action research is a cyclical process, data must also be

gathered after the action has been taken to measure and determine the effects of the action and to

feed the results back to the organization. (Burke & Litwin, 1992).

2.8 Conclusion

The conclusions drawn from the literature reviews suggests that many actions and factors are

vital for a company to understand and plan the strategies accordingly in order to achieve success

of a merger and acquisition. From many of these parameters many include the role of

management and leadership, role of national culture and corporate culture, role of parameters

suggested by the Hofstede research, cultural competency of managers, supportive structure of

organizations, transparent communication, collaboration to build a new culture and adoption of

different models for cultural integration. Additionally it is important in the merger and

acquisition process the identification of factors that would in somehow become an important

thread to achieve the final outcome.

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Chapter Three

Research Methodology

3.1 Introduction

The research design proposed should have quantitative and qualitative approaches to unearth the

complexity and dynamics of merger and acquisition integration process (Rottig et al., 2013). The

methods will follow the two developed dimensions as cited by Cooper & Finkelstein (2013) that

is sequence of implementation and priority of methods. Though the qualitative research does not

furnish a systematic comparison between organizations or subcultures within one organization

Cai (2008), it is helpful to gain insights so it will be recommended for primary research. The

next method is quantitative method that provides systematization, repeatability, precision,

comparability (Tucker et al., 1990) and because of these benefits, quantitative research should be

followed after qualitative research to obtain generalization of study. The questionnaire should be

distributed to 100 participants having common characteristics to ensure the sufficient feedback

(Kent, 2007). The questionnaire will consist of closed-ended as well as open-ended questions to

gain in depth answers (Saunders et al., 2012). It is proposed that research will adopt a

triangulation approach consisting qualitative, quantitative and theory method to minimize the

research biasness and ensure validity of data (Yeasmin& Rahman, 2012). Along with

questionnaire interviews and observation methods are also recommended to use for research. The

interview script needs to be pretested to avoid the ambiguous, embarrassing and unnecessary

questions and needs to be reformulated to avoid further frustration and complication (Jordao et.

al., 2014). The ethical consideration is an integral part of research process (McBurney& White,

2009) and ethical sets that should be practiced are included in this report.

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3.2 Research Method and Design(s)

The research design of concerned company is a social research design. As the change occurs due

to mergers and acquisitions are specific questions must be asked from the participants. There are

fears of being laid off or not getting salary increases or unfair practices by the acquirer company.

All these come from the perception of individuals and groups working in the organization. For

reducing the stress level of employees and retaining their confidence in merger and acquisition

outcome, clear communication should be established, culture and business processes should be

aligned, support for employee development should be available and top talent of the company

should be retained.

For this purpose, individual and groups perceptions must be measured. As a result from the

cognitive process of individual and it is very difficult to apply quantitative research methods to

obtain data with accuracy, mostly the qualitative research design is considered to obtain results.

As the human subject is involved in research process, so it is preferable to understand different

types of qualitative research to determine appropriateness of research method.

The habits, preferences, attitudes, perceptions are hard to measure and in the absence of accurate

data regarding these can only prompt towards qualitative research method. There may be the old

results regarding the turnover rate, absenteeism rate and cases of conflicts and chaos in the

previous mergers and acquisitions. However the company is to be soon acquired by an American

company which the roots are totally different culture from the culture currently blended of

Italian, French and German culture in which is difficult to analyze the impact of American and

Switzerland culture when to organization work together. It is recommended that qualitative

25


research should be adopted and carried out first to provide a base for hypothesis that is a part of

quantitative research.

The definitions of the qualitative research design confers that it is a subjective research approach

that is used to describe the life experiences of humans and provide them meaning. The goals of

the qualitative research design are to gain insights and explore the depth, and complexity

involved in subject. The characteristics of qualitative research are that it is a soft science, has

complex and broad focus, is subjective, helpful in development of theory, helpful in shared

interpretation and communication and observation, and provides holistic view of research and

basic element of analysis is individual interpretation and uniqueness (UMSL, 2000).

The quantitative analysis is concerned with testing the cause and effect relationship, is a hard

science, is objective, tests theory, provides control, and basic elements of analysis are numbers,

statistical analysis and provides generalization. Due to absence of individual perceptions and

attitude regarding the merging effect, it is determined that research design should start with the

qualitative research design first and after obtaining feedback from the participants it should use

the quantitative research to provide generalization of findings of research study. The

phenomenology reveals that the purpose or goal of research is to know the subjective reality of

individual.

The research question is how mergers and acquisitions can influence the acquired organization

performance and culture leads to subjective analysis of people. The research question compels to

choose a qualitative research design and ethnography research that purpose is to describe the

culture characteristics. The methods are direct observation and interactions with subjects and

these are qualitative tools for ethnography study.

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Further the different research design methods are taken into account here to judge the

appropriateness of chosen research design that is descriptive design and descriptive research. The

aim of the descriptive design is to observe and describe. The tools for the descriptive research are

descriptive research, case study, naturalistic observation and survey.

The co-relational studies aim is to predict and tools are observational study, longitudinal study,

cross-sectional study, cohort study and other studies. The semi experimental designs are aimed to

determine the causes of effects and quasi experimental design, field experimental design as well

as twin studies are the tools to conduct this research design. Experimental designs have aim to

determine the causes and tools are true experimental design and double blind experiment. As the

research aim is to conduct subjective analysis and it is concerned with providing conclusive

statement there is no scope of experimental design. Also the cohort study and cross sectional

studies are not performed due to focus on individual perceptions and attitudes.

The feasibility of adopting the qualitative research mostly for the analysis of merger impact is

due to the human subject involvement and analysis of their perceptions, attitudes, preferences

regarding the impact of merger and acquisitions so that a desired behavior expected from them

can be shaped by the top management. For this purpose, a generic qualitative approach is

adopted. The generic qualitative approach is described as process to seek the worldviews of

participants and understanding of a phenomenon (Cooper & Endacott, 2007).

The worldviews can be obtained through the use of descriptive research design. This is a

combination of ethnographic research and phenomenology research design combination. As the

ethnographic study is related with the culture impact analysis and phenomenology research is

27


concerned with the individual reactions, perceptions and feelings regarding merger and

acquisitions (Biddix, 2009).

Both the research designs are recommended to use in the research. Why the qualitative research

is largely promoted for the cultural analysis and individual attitudes along with the feelings

towards certain changes. These changes taking place due to mergers includes subjective analysis,

which is not limited to defined, variable (Mehta, 2013).The analysis of feasibility of both

methods reveals that first qualitative method should be employed and after that quantitative

analysis should be conducted.

3.3 Participants

The participants in the study are employees that have encountered the past acquisitions occurred

in the in the past years within the factory in Switzerland. The sample size of 50 - 100 peoples

should be considered and the relevant characteristics of population are that they should have

experience of change process before and they can elaborate the likely effects of change process

due to merging or acquisition of company so that their feeling towards merging and acquisitions

can be analyzed (Kent, 2007). These factors are important to gain insights how they survive

through the change process and how they have adopted the strategies to build a new culture and

work ethics to get along with different employees.

Also the availability of them for research, their knowledge, and their background that confirms

that they are part of multi-skilled and diverse cultural background team can enhance the research

findings as they will be able to provide practical solutions to the issues that generally emerge due

to merging and acquisitions. Generally the respondents for the sample consists of employees

from top management who are involved in multitasking for assessing their cultural competency

28


as they are in leadership position, so the employees that are chosen for the sample must hold at

least mid to higher position in their respective organization.

Probability sampling method is chosen for survey of sample drawn. The reason for selecting the

probability sampling method is that every member of population has a probability that he can be

selected for the sample thus reduces the chances of biased representation and biased result. Every

person has an equal opportunity to be selected as the participant of study there by it increases the

sample representativeness for population. This method reduces the sampling error. Further

stratified sampling is chosen that is based on certain parameters such as person experience in

working with diverse work group before, service tenure, and position in the organization.

Generally the most senior position occupied by the employees comes under these parameters.

This sampling method is chosen from other sampling methods are that it can offer greater

precision that other sampling methods, it can ensure that unrepresentative sampling method

should not be formed. As the focus is to select most experienced employees who are in

leadership position to analyze their respective feeling towards cultural influence and impact of

mergers and acquisitions, creating a subgroup in both the organization provides sufficient

representation of participants and the stratified sample can assists in become economic

advantage.

Thought the simple random sampling is easy to administer than stratified random sampling lack

of precision in simple random sampling method does not make it attractive to consider. These

people can come from the holding different positions such as CEO, top management, senior

managers, managers and junior managers. Creating equal participation of these groups in

stratified sampling method can be difficult due to experience factors in managing the diverse

29


work force and experience in change management occurred prior because of mergers and

acquisitions, it is recommended to adopt a disproportional sample for stratified sampling. Here

the subgroups representation in sample is disproportionate. The non-probability sampling

method is not chosen because of the characteristics like not every member of population can

have the opportunity for selection in sample, there is no sampling frame, non-random selection

of participants, is likely to produce a biased sample, restricts generalization of findings and

population parameter that is crucial for the study are unknown in this method

The recruitment and selection of participants must consider these strategies to attract the

participants. The participants should be approached by the Memos and circulars regarding the

questionnaire nature and content so that they can be prepared to answer the questions in advance.

Notice board of company can also be used for participating in the research. Emails and

telephones can be used to inform participants in advance to participate in the research. As this is

internal recruitment of participants that are the current employees of acquired company, certainly

there is no need to use advertising for attracting the participants.

The content must clearly furnish the research aims and objectives that are to be accomplished.

The content must be easy to comprehend and should be in the easy language of participant to

have better understanding of questions of questionnaire. Before starting the research, the consent

of the participants must be acquired for participation in research. The time for fulfilment of

questionnaire, mode of conducting the questionnaire through email, and personal interview must

be determined with the participants.

As the research tools are observation and interview, a prior consent to have one to one interview

with participants must be fixed so that research can be carried out. The doubts and issues of the

30


participants must be sorted out by one-to-one conversation after their approval of participating in

the research. A written consent should be taken from the participants to ensure that they are

available for the research.

3.4 Materials/instruments

The materials that are used for the survey, interviews and observations are questionnaires. The

questionnaire contains the relevant questions that analyses the cross cultural impact, merger and

acquisitions effect on the employees. The questionnaire contains around 30 questions that have

to fulfill by the respondents. The questionnaire consists of structured and unstructured questions

both. The strategy for using the unstructured questions is to gain the deeper insights about the

perceptions of individuals regarding the cultural exchange effect and their own perceptions and

attitudes towards acquirer company management and acquired company management. The

questionnaires examine the mission and vision of companies, business philosophy, and direction

of organizational culture, extent of cooperation, communication system, motivation system, and

freedom of expression of employees, reward and recognition programs of companies and their

leadership practices.

The interview method will be one to one interview. The pattern of interview is semi-structured so

that open questions of questionnaire can be without limitation of answer (Saunders et al., 2012).

This can help to gain more understanding in their perceptions and attitudes. In this way,

interviewers would communicate freely and describe common issues reported in the literature on

the effect of culture on management performance and what changes took place in the

organization system during and after integration period.

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For measuring the validity and reliability, concurrent, content and predictive validity should be

considered. Validity refers to the degree in that the test of questionnaire should measure the

intended measurement (Heffner, n.d.). For content validity it is recommended to have logical

reasoning in setting the questions. Here it is determined that question should cover the full range

of issues of problems that are measured.

For measuring the face validity, the research instrument that is questionnaire must have a logical

link with the objective. For content validity, Likert scale should be used such as providing points

to questions. For generating reliability, it should be ensured that questionnaire should produce

the similar answers repeatedly. For this purpose, test retest reliability will be performed for

stability and test should administered twice for the same participant at different times

3.5 Process of data collection

The tools are questionnaire, interviews and observation. The data will be collected through the

questionnaire will be coded on the basis of Likert scale. The interviews will be semi structured

and unstructured. Interviews must be recorded to obtain and analyze the data and responses of

respondents.

The observation process involves direct observation where the interviewer will be involved in

exchanging the dialogues with the respondents. The person will jot down the actions and facial

gestures of respondents. The observation method is direct because indirect method of

observation cannot be employed due to access issues of employees.

For data collection process these steps are determined.

32


First the issues or opportunities for collecting data should be determined. The issue here

is the influence of merging on work culture and employees performance.

In the next step the issue is selected.

In the third step, planning regarding approach and methods should be determined. The

questions such as collection of particular data, group of interest to be compared of,

department locations of collection of data, sources of data such as quantitative or

qualitative, and duration of data collection must be taken in to account.

The next step is the collection of data and this step must consider that who will collect the

data, will be responsible for logistics, resources, technology and people use, responsible

for communication process, and addressing the concerns of people and will responsible

for test period of data collection to improve the data collection method.

The next step is to analyze and interpret the data.

The last step of data collection process is to provide action of result obtained.

For coding the data, Likert scale is used. This increase the ease of the data analysis process thus

enabling the researcher to incorporate various statistical data analysis tools such as the Statistical

Package for Social Sciences (SPSS) and Microsoft Excel. The incorporation of these data

analysis provides the availability to convert the qualitative data into variables that are easy to be

understood by the 2 proposed analysis tools.

3.6 Ethical consideration in research

The ethical consideration in the descriptive research can be the own biasness of researchers to

present the information. The other issue of strained relationship can also be possible between the

respondent and researcher (Orb et al., 2001). The information acquired must be kept confidential

33


and there should not be other uses of information that can harm the privacy of respondents and

threaten them for promotion, or career advancement.

For ensuring the confidentiality, the access to the information must be offered to accountable

person and no name of participants should be mentioned in the report. All the sensitive

information such as their telephone numbers, their account numbers, their email addresses, their

employee identification numbers, their personal information, their other characteristics or codes

that can reveal their identity must not be disclosed in the research. There are issues of informed

consent, misconduct in research, conflicts of interest and authorship.

For obtaining the informed consent, information must be shared and questions and concerns of

participants should be addressed to obtain the informed consent. The researcher must be aware of

the culturally sensitive information that is required by the participant. A written consent form

Performa must be sent to the participants and if there are any doubts regarding the research, it

should be sorted out.

After the written consent of participants to participate in research, researcher should start the

process. It is important here that the consent form must be in the participant own language to

understand the content of research and their role in research. The consent form must describe the

availability of participant for a particular time, the location where the research can be held, the

rules of ethical research so that participant can be ensured that they do not have any risk in

participating in to the research. Getting the formal signature on the informed consent form can

approve the conduction of research, however is no longer necessary.

3.7 Summary

34


The descriptive research is proposed that has the elements of phenomenology research and

ethnography research. The tools are questionnaire, interviews and observation for research. The

questionnaire should use the Likert scale and should use the mode measure of central tendency

for the ordinal and interval. Coding analysis tools will be used in order to easy and statistically

analyze the qualitative data into variables and make the possibility for the researcher to identify

the attitudes of the employees interviewed related to the cultural differences in the existing

acquisitions.

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Chapter Four

Presentation of Results

4.1 Introduction

The description of this chapter will primary present the experience description of the participants

in the study related to past merging and acquisitions experienced in the factory in Switzerland.

The emphasis of the study is based on demographic variables including the gender, management

level and number of acquisitions experienced into the organization by the employees within

different department. The following will be consisted in the summary of the questionnaires

results, summary of the interviews and the presentation of a discussion based on the results

showing the comparisons and contrasts perceptions by the employees in the factory in

Switzerland that have experienced many past merging and acquisitions.

4.2 Data Presentation

Research study includes gathering data from the participants to be reviewed and such a study be

carried out dealing with the study of influences on the acquired organizations through the

acquiring companies. Gertsen, Soderberg and Top (n.d.) described that significant degree of

disruption and transformational changes surely occur within the organization towards merging

and acquisitions. One of the manners of the affect felt on the performance and variation is the

culture behavior.

Culture behavior with the needed improvement and imperfection before and after acquisition

takes place becomes crucial study for the understanding (Accenture, 2009). Integration is

considered to be also crucial from the perspective that it requires strategic and organizational

36


conditioning factors that include the culture along with the acceptance and the adherence to the

best management practices followed by the organization.

There are various factors that are responsible and do influence and improve the implementation

along with the presence of cultural integration. Integration involves common management and

financial control systems adaptation (Jones & Hill, 2008) and involvement of people synthesis in

one corporate culture (Knilans, 2009). For that reason, available sources about the chosen topic

will be investigated, primary sources related to the research topic setting up of the required goals

and the arrangement of the incentives accordingly done while providing the needed motivational

levels to the employees is crucial.

The presence of the past and present experiences of the employees serving the various

departments in Alstom Grid Switzerland and the influences they have come across as part of the

new roles serving in the various departments now serves as part of the analysis done in order to

understand the various influences pertaining to the acquisition. The best practices as part of the

management strategy and the order in which the flow of the transactions is maintained is

important. At same time the information will contribute to bring attention of management of how

much expectance employees wait to contribute inside the corporate atmosphere.

4.2.1 Participant Background

In the past 53 years of working unit in Switzerland, the Factory in Oberentfelden has been

rebranded into different organization names. The initial name came from a high and medium

voltage business called Sprecher & Schuch. In 23 years of expansion of business to Turnkey

projects a further integration with GE Alsthom started with some rebranded names to only

Alstom which during late 90s floated the stock market.

37


Few years later a new integration with a French organization, AREVA T&D, expanded the

organization. The vision of AREVA T&D was the product line development and extension of

new workshops. In 2010 the company has been returned to the hands of Alstom leading to a new

sector, Alstom Grid, in which today’s situation will be facing a newer merging to an unknown

and different culture (Alstom, 2013).

To cover such many transitions, there are still employees based in the factory in Switzerland that

have experienced such many transitions. Many of those people experienced in between 1 to 5

merging and acquisition transitions. For that interest, the background of the participants include

the employees of the organization who have been part of the management teams and under the

leadership as part of the various departments such as Project Management, Sales and Tendering,

Research & Development, Engineering Department and Human Resources.

4.2.2 Rank of employees

In order to identify many experience in past merging and acquisitions, especially with the

different issues related to cultural differences and organizations performance within the

organization, different management level has been taking into consideration for the study. Many

of these levels include top, medium and lower level managers. With this difference in

management levels, it makes more interested to identify the factors that most impact in each

level and reach the result of differences between the effects of culture towards its operation.

4.2.3 Departments involved in the study

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With many merging in acquisitions happened in the past, it is important to understand the impact

and effects that each department has experienced and how much cultural differences affect in the

employee’s performance. The objective of the dissertation is to review the experience of many

departments involved in a project which also felt impacted during past merging and acquisitions

in Alstom Grid GmbH. From all these impacted departments, some were available to share their

experience: Project Management, Tendering and Sales Management, Research & Development,

Engineering Department, Human resources and Operations department.

4.2.4 Age and Gender

Of the 90 invitations to participate in different departments for the questionnaire, 42 respondents

(47%) has described their experience, being 34% male and 8% female, most with a range of age

in between 36 – 45 years old and worked more than 4 years in Alstom Grid in Switzerland. The

decision in verification of age, experience and gender is to verify the efficiency that employees

coped towards many changes due to transitions. The following tables illustrate the demographic

data obtained which has been considered important for the research.

Invited employees to participate in the questionnaire

Yes (47%) No (53%)

Gender

Male (81%) Female (19%)

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Age Range Management level Ordinary employees

18-30 1 0

31-35 5 1

36-40 8 2

41-45 8 2

46-50 4 2

51 and above 5 4

Table 1.1 Source: Author (2015).Questionnaire – Demographic data

2%

12%

14%

5%

40%

17%

2%2%

5%

Departments involved in the questionnaire

a. Purchasing and Procurement

b. Finance

c. Tendering and Sales

d. Human Resource

e. Project Management and engineering

f. Services

g. Research and Development

h. Production, Assembling and Testing

i. Quality and Industrialization

j. Others

Table 1.2 Source: Author (2015).Questionnaire – Department involved in the quantitative analysis

40


a. Values

b. Norms

c. Language

d. Practices

e. Beliefs

f. Behavior

g. Organizational Goals

0 2 4 6 8 10 12 14 16 18

Difference Cultural Factors

Difference Cultural Factors Respondents Percentage

a. Values 9 24%

b. Norms 4 11%

c. Language 5 14%

d. Practices 14 38%

e. Beliefs 3 8%

f. Behavior 11 30%

g. Organizational Goals 16 43%

Table 1.3 Source: Author (2015).Questionnaire – Difference cultural factors

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4.3 Summary of questionnaire Outcomes

4.3.1 Quantitative Results

When many of the employees where questioned to identify many factors that impacted in

departments and in the organization during several past merging and acquisition, many widely

responses were given. From the responses given many were related to difference cultural factors

describe in the question 7 of part 2. Such factors included reasons related to value, custom,

belief, traditions, ethical and moral policies, objective and behavior of the organization all

described in the Table 1.3 above.

More than 50% of the respondents were of the opinion that merging & acquisitions have impact

in the Alstom organizational structure and many other values within the organization. Positive

outcomes have brought the organization to a stronger management structure and course of

operation culminating into attainment of a high competitive advantage over other competitors

and take the result that leadership style and communication programs are important factors in

order to succeed in a merger and acquisition.

Much wider opinion were also raised in the evaluation conduction of the existing values in

between the Areva T&D and Alstom Grid due to the same French organization culture to define

if the mergers and acquisition would become successful or not. Many of these respondents have

many difference responses in organizational philosophies as a major factor to achieve the success

or failure of mergers.

4.3.1 Qualitative Results

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The outcomes as part of the interview included the changes that the participants felt due to the

previous acquisitions and the manner in which the structure got impacted within the

organization. The fact that the realization that the desire with separation of regions and

manufacture, as quality would not be distributed correctly to customer, due to non-optimized

access of opportunities to get contracts at reasonable margins with customer expectations.

The relevance of the culture is an important factor as it does impact. Alstom – French was

dominant and culture was strongly on cost savings (control). Areva T&D on the other hand, had

the culture which was entirely focused on customer satisfaction and market grown and

opportunities (more training, evaluation of results) differing from Alstom in which focus were

most on cost and this decrease the market volume.

The top leadership also has an impact on the organization’s culture. In the same way it also

impact on the employees after merger or acquisition. The culture of lower levels of power

distance, i.e., the process of decision making is decentralized and happens at various levels of the

organization. Further the individualistic culture of Alstom aids in most managers taking

decisions on their own.

While decentralized and centralized form of decision making have their respective, it is

increasing seen that business favor decentralized decision making. The performance of a

company depends on different factors like its physical and intangible assets and its capabilities.

Further all companies, even within same industry, are very different and its performance depends

on various unique features and competencies based on their own experiences, nature of its assets

and capabilities and organizational culture. These assets and abilities define the performance and

success of each company.

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There is no real issue with ethics, as we are never force to be unethical. We have tried to find

solutions which are with interest of company based on ethics. Management has the importance

to take control of ethical within his employees and control at morale balanced level. There was a

very positive experience with the takeover of GE Alsthom to Areva T&D (well structure) with

communication and training program to understand the culture (lot of actions done).

Diverse integration programs divided by different business units needed during GE Alsthom to

Areva was none done; either being same nationalities have different style cultures of

management behavior. The takeover to Areva T&D, plans for growth existed where strategically

was done to obtain a market share and grow split in sub steps which became quite positive (price

sold was complete different of what was bought due to high development of market shares and

products). After Alstom Grid took over the aim was only on optimize costs. Commitment of

clear vision and the manner in which to act in line within the vision with greater consistency is

the requisite.

4.5 Conclusion

This chapter supports the presentation of all quantitative and qualitative data collected by the

researcher in a manner to facilitate the understanding of the objectives and outcome to the

questionnaire and interview performed to selected employees at Alstom Grid GmbH. All

directive questions were answered and presented within this chapter. Some of the answers were

assessed and represented in graphs and tables in order to perform a clear analyses and delivery

the connection to the research questions and objectives established in this dissertation.

Many variables were considered in selection of candidates and their experiences within different

departments during past merging and acquisitions. The data presented in this chapter and results

44


described will be effective and useful on the interpretation of data analysis and discussion in the

next chapter. Consecutively it will draw the conclusions and guidance of recommendations based

on the interpretation and understanding of data.

45


Chapter Five

Analysis of Data and Discussion

5.1 Introduction

The measurement relevant to the effect of the objectives linked to the simulation on the relevant

adherence to the human participation and the performance in the arena. A company to be

successful in its pursuit of profit maximization depends on various factors that it may fully

control, partially control and cannot control. Further these factors could be qualitative or

quantitative.

Qualitative research is a type of systematic research. In broad terms, scientific study comprises

of an evaluation that, strives to find solution to a question, the methodically utilizes a pre-defined

group of ways to reply the research question, gathers proof, derives the outcomes that were not

identified earlier and the derivation of outcomes is useful beyond the immediate limits of the

pursuits of the qualitative study shares the features. The forte of qualitative research is the

capability to offer the intricate word-based on the consideration of accounts of ways individuals

understand or experience a specific research and referring to our case, that of the acquisition of

the company and the impact felt as a whole in the organization. It offers information related to

the human aspect of a research problem, i.e. the frequently contrary actions, beliefs, views,

feelings, and interactions of humans.

Qualitative studies are always effective in recognizing aspects that are like the societal norms,

social and economic status, gender factors and its role, ethnic origins, and religion, whose

46


influence in the research problem may not be evidently seen (Mack et. al, 2005). When utilized

along with other research methods like statistical or quantitative analysis, qualitative research

can aid the researcher to infer and effectively realize the intricate reality.

5.2 Data Analysis

The data management analysis from the questionnaires taken up as part of the study include the

identified volunteers who are part of the study along with the preliminary questionnaire

conducted and the analysis basis the performance exhibited with the intervention done.

Leadership can be defined as the activity of leading an organization or a group of people. It also

set up a focused and clear vision, influence and motivate people to passionately empathize with

that vision and ensure delivery of require results from subordinates by establishing a culture that

is consistent with the vision (Bedinarz, 2014).

Generally the various traits in a person that can mean to suggest good leadership skills are ability

to lead and manage, functional or technical excellence ability to see context of an activity, i.e.

larger picture without losing the grasp on minor details, decisiveness, initiative and self-assertive

or self-confidence. Latest acquisitions focused on customer and regions. No much management

satisfaction on latest change. Headquarters location, national culture (French), management

levels of acting are the considerations.

Bearing in mind, the new future acquisition changes will be felt quite strong from French to

American. Business and competition should govern respect and in be in line and follow the

ethics. With the new acquisitions there is still some future fulfilled of organizations ethics and

adaptation. The initial period can be complicated, needs to be clear stable to keep employees

focus on the direction is being followed. The growth and development plans of the organisation

47


impact the organizational change and cultural development. The interviews and observations are

conducted in different department of organization to understand that how acquired organizations

cultures are influenced by the acquiring companies. The set of questions are presented in

Appendix 2.

5.3 Responses and Interpretation between different departments during

previous transitions

5.3.1 Industry type and organization structure

The interview with different departments and their results are analyzed in this regard. Many

departments have demonstrated a different range of feeling in the way their departments were

impacted during the past merging and acquisitions transition occurred. The expectances of the

following coming change in which might become an advantage or disadvantage for some of the

departments are also identified.

From the data collected, the most significant merging and acquisition experienced by most of the

departments were during the transition of Areva T&D to Alstom Grid. The organizational

structure before and after acquisition reflects that Areva T&D had a vision and objective to

improve their products and values towards customer, while Alstom Grid has set up new product

lines and new regions and focused on customers and cost saving leading to less time in the

factory unit.

48


The acquisition which involved organizations with different product portfolio, however related to

the energy industry, proved compliance of the hypothesis tested by Mantravadi & Reddy (2008),

showing that pre and post merging operations do make difference in the performance of the

organization. With the changes in the strategy of what was before to after, the main focus

became in the expansion of markets and reduce of cost to achieve further competition on the

market, however many factors could be seen impacted towards the new vision of Alstom Grid

employees post merging in comparison to the vision stablished by Areva T&D before the

transition.

Towards the merging and changes in the organization structure, all departments have felt a

decentralization organization structure. The most affected departments in that case, as identified

in the questionnaires and interviews, were Tendering, Sales and Research & Development

departments. In those departments, there were no desire with separation of regions and

manufacturing due to inability to distribute the quality to customer correctly and the reasons that

have offered are not having optimization access of opportunities to obtain contractors at

reasonable margins.

As per Alstom Grid’s decision and according to Fiol & Lyles (cited by Kessler et al., 2000),

centralized organization structure restrain the internal learning process and makes diffusion of

knowledge difficult across the organizations and also leads to low decision making autonomy by

those employees that resist any attempts of innovation. The vision of a decentralized structure is

that decisions and problems can be resolved at lower level in between those employers closer to

the problem question, in other hand can also attribute decision experience, gain of service

oriented culture and greater level of procedure fairness. However these changes are not much

seen as an advantage by the actual employees whose believe that centralization lead to more

49


efficient operations, particularly when the organization is operating in a stable environment

(Creative Commons, 2012).

5.3.2 Other factors influenced by previous Merging & Acquisition

In many manners to understanding the influence of merging and acquisition in the organizations

culture and performance, the access of questionnaire and interview within several departments

have identified that many factors became crucial influential triggers. Business and competitive

forces, the influence of political system, working philosophies and the management performance

were some of the factors delivered from many of the participants. The categorization of these

factors can be clearly compared to the factors described in the literature review.

Competitive forces are usually shifted according to needs of the industry, requirements of

customers, market cost fluctuation, product and process innovations and anything else that upset

the competitive balance (Day et al., 2004). Alstom Grid’s decision to a new vision and change in

organizational structure are some of the strategies taken to follow the competitive forces.

Additionally, the new competitive forces also drive the influence and adaptation of a new

political system to fit the culture of the acquisition organization, which are one of the factors that

contribute in the failure of a merging and acquisition. To what extent the business and

competitive forces have impacted the chosen organization ethics and culture is responded by

some participants that Alstom follow the fashion of copying ABB with a delay factor of 2-3

years.

50


It has also been noted by many of the participants that as both organizations belonging to the

same national culture, French, adopted strategy was taken as a main core during the merging and

acquisition forgetting the cultural concept adaptation (Hajro, 2015). The poor cultural fit inside

an organization can influence in the productivity, morale and turnover rate of the employees,

which are usually embedded to an existing established culture (Marmenout, 2006) and the impact

is only felt during the influence of a merging and acquisition phase. Within a cultural fit

assessment, values, products, beliefs and others are amongst of issues that should be taken into

consideration.

Apart of an approach to identify the cultural fit, integration and leadership selection, as identified

by DiGeorgio (2002) are vital factors that should also be well defined to lead to a successful

merging and acquisition. The selection of new leaders that follow the company principles and

practice are a common recommendation philosophy of working during an integration process.

The participants of the questionnaire have clearly identified the organization culture, in some

level; have been impacted during the past merging and acquisitions. Important key factors as

described by DiGeorgio (2012) were also described by the participants and that employee morale

and a cultural change management with strong leadership and proactive communication plan are

extremely necessary.

5.3.3 Organizational and national culture differences

From many studies available (Hofstede, 1980 and 1991; Hause et al., 2004; Inglehart et al., 2004;

Schwartz, 2004; Trompenaars & Hampden-Turner, 1998; all cited by Sarala, 2010), the

51


organizational and national culture differences have been considered one of the main sources of

hostility and distrust in between organizations. Sarala (2010) asserted that existence of a cultural

diversity in organizations involved during merging and acquisitions despite they functioning

within the same local context.

Due to Areva T&D and Alstom Grid belong to the same national culture; no social-cultural

integration analysis was recognized by the participants. The intention is further supported by

studies performed by Ulijn et al. (2010) & Gouled and Schweiger (2006) who suggests that

cultural aspects should not be generalized. In other words, Alstom Grid merging and acquisition

formation was oriented on the misconception of assuming the existence of familiarity of culture

between the Areva T&D and Alstom since they had a similar national culture.

To support the analysis approach of Hajro (2015) in understand how cultural differences of

organizations affected the integration process and factors that facilitated or hindered the

successful socio-cultural integration in merging acquisition, the qualitative analysis with those

employees that have witness many past acquisitions became influentially necessary. Questions

based on their experiences and expectance with the new coming transition would be beneficial to

the new challenges that managers will face with awareness of how to deal with such situations.

Many departments, such as Research & Development, Engineering and Project Management

have witness a lack of a cross cultural interaction and some level of friction and conflicts

between the employees and managers (Emerson, 2001).

Top leaders’ impact on organization culture reveals that top management is supportive and

provided cross cultural training to the employees to adopt changes after merger and acquisitions

in some departments. By others, leadership also impacts the organizational culture but due to its

52


inefficiency, leadership is found slow to respond the queries of employees. It is recommended

that efficiency should be introduced during the integration phase.

5.3.4 Management role and performance post merging

One of the major challenge tasks during a post merging and acquisition are given to managers

and leader professionals. Many Human resource oriented studies focused in the specific attention

that Managers and top management professionals face with customer concerns and situation

specific considerations when making integration decision (Buono & Bowditch, 2003). The

daunting task to consolidate the aspects of business by eliminating, generating or merging the

various tasks as well as functional duties of the respective departments are some of the situations

recognized by the managers experienced collected during the qualitative research.

Employees are at the triggering point of every process post-merging and this means that

managers need to focus in delivery best communication practices as well as query resolutions.

Most managers have a full-fledged plan for taking on the questions and concerns of the

employees and this is done by making a platform where in the concerns of the functional

departments are met and resolved. The use of effective communication also minimizes the

challenges associated with ambiguity as suggested by Fost and Sullivan (2010).

One of the methods to increased success during a post merging and acquisition is by assessing

the existence of culture differences and the development of strategies to blend it. Leadership and

communication skills are vital qualifications that should extremely to coordinate order and

mitigate any type of resistance amongst the employees. Effective communication should be

enhanced from top to the lower levels. It should be ensured that there is continuous

53


communication during the entire transformation period. In total 80% of the participants are of the

opinion that effective communication is the most important tool in managing change especially

during establishment of mergers and acquisition.

5.3.5 Overall departments

The results obtained by the overall department employees’ interviews are that they have 3 to 4

merging and acquisitions experience. The organization structure is matrix and it is directly linked

to product line. Employees have suffered non-cooperation from the sales team due to moving

sales team to regional teams. The globalization is a factor that impacts over the selection of

organizational culture.

The impact of business and competitive forces over the ethics and culture is that sub suppliers

are forced to accept the ethics of organization and other factors that shape the organizational

culture are environmental health and safety. The top leadership of organization has impact over

the organizational culture. Employees follow the guidelines of organization to be in line with

organizational ethics. Organization has taken initiatives to introduce training program for the

new employees. The recommendations are that every company should follow the market rules

that are based on growth.

Further the analysis reveals that most of respondents say that there are differences in culture

between the acquired and acquirer companies. Most of the respondents say that differences are in

terms of norms, values, organizational goals, practices, behavior, languages and beliefs. The

differences have affected the organization that is said by many respondents and also many

respondents say that these differences have not affected the organization.

54


For the question that how the relationship between the cultural factors can be improved is

responded by the respondents that fostering open communication, respects and interests, trust,

avoidance of centralized management system, developing common understanding, and other

factors. How merger and acquisition affect the organizational culture is replied by majority of

respondents that it depends on management and the enhancement of morale of employees is also

dependent upon management initiatives.

The factors that affect the selection of company for merging is responded by them are

profitability, organizational culture, and competitive environment. The merging of Alstom with

Avera is judged by employees that it is overall a good move from financial viewpoint.

Employees responded with mixed responses that Alstom organizational culture is affected by the

acquiring of other companies and some say it is greatly affected while other say it is affected to a

certain extent or least affected.

The most important aspect of merger is restructuring of organization question is responded by

employees with mixed responses once again. Most employees have suggested that change

management is crucial for merging and acquisitions. Question that merger and acquisitions

should be structured around the complementary resources and capabilities have reflected the

mixed responses of employees. Some say it is essential while other say structuring should not be

based on complimentary resources and capabilities.

Most employees have responded that it is better to merge or acquire the ailing company to turn it

around for long term gains. Many employees have opposed the idea of merging in the same

sector. Again about the question of whether employees and consumer suffer due to mergers and

55


acquisition, employees’ responses shows lots of confusion in their mind and they may be against

of merging activities.

There is confusion in terms of changing the brand names after the merger as well. Employees

have also disagreed strongly about the decision making authority of channel partners in merger

or acquisition. Employees have strongly disagreed with the question that consumer trust and

loyalty is decreased when company is acquired by the better company. Employees strongly agree

with the question that management must have a proactive communication plan for employees

after mergers and acquisitions.

Employees have agreed that change program must be done by professionals and should be

embedded in organization culture. Employees have also agreed that company should refrain to

go for ambiguous profitability analysis and it must have clear objectives to achieve after

acquisitions. People have agreed that merger and acquisition should be based on internal

strengths and resource capability.

All these factors are taken in to account to conclude that what are the important factors Alstom

organizations should consider to effectively function with the merging organization.

5.3 Discussion of the research question

Most of the employees have agreed that organization should have active pre planning of merging

and acquisitions and it must consider to offer adequate cross cultural training program, open and

transparent communication, internal strengths and resource capability, active role of top

management leadership, complementary resources and business philosophies, consideration of

Hofstede dimensions, perception and morale and motivation level of employees, efficient change

56

MACIEL-RIBEIRO Alex, 11/27/15,

You had a very limited sources to support your analysis here. In chapter 5, please ensure that you use of external resources to support your analysis. You should use external resources to:1. Explain some possible factors that may lead to such research outcomes.2. Compare and contrast your findings with the previous research literature and determine how your findings are consistent or different from others.


management program, needs of channel partners, settling the grievances of employees and

promotion of diversity in organization, organizational norms, beliefs of employees,

organizational behavior, organizational goals, and practices.

All these factors must be improved by the organization to make the merger a successful merger

as the analysis reveals that many employees are complaining about the inactive role, poor

communication and poor change management initiatives of Alstom organization so the

organization must improve these areas to make the merger and acquisitions successful.

Organization must offer cross cultural training to employees to develop cultural competency.

Also the company must listen to the channel partners grievances and demands before going to

mergers and acquisitions. The acquired company culture can be contributory to the success of

acquirer-company by considering these factors.

5.4 Conclusions

The conclusions drawn from data collection is that organization must focus on various factors of

organization behavior such as perceptions and attitudes of employees, leadership role, cultural

differences, change management program, existing values, norms and behavior of merged

organization, its business philosophies and approach for conducting business and it should

implement the conflict management strategies such collaboration, theories of change such as

force field analysis theory, team building theories such as Tuckman model, and provide the clear

roles and responsibilities, transparent communication at all layers, provide familiarization

training to new employees, and consider other important measures.

57

Ole Thanasak, 11/15/15,

You had a very limited sources to support your analysis here. In chapter 5, please ensure that you use of external resources to support your analysis. You should use external resources to:1. Explain some possible factors that may lead to such research outcomes.2. Compare and contrast your findings with the previous research literature and determine how your findings are consistent or different from others.


Chapter Six

Analysis of Data and Discussion

6.1 Introduction

58


6.2 Research summary of key findings

6.3 Practical Implications

6.4 Limitations of the research

6.5 Scope for future research

6.6 Summary

59


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Appendix 1

Survey Questionnaire

Welcome to my MSc dissertation questionnaire regarding the performance

and cultural influence towards an International acquisition.

Dear Participant: My name is Alex Maciel Ribeiro, I work at the Project Management Department (AE2) in SEH and I am conducting a questionnaire in fulfillment of my dissertation for an MSc Programme in Project Management at the University of Liverpool. For my final project, I am examining the experience of past performance and cultural influence of Alstom Grid Switzerland during various acquisitions in the previous years of service. Hence, I am inviting you to participate in this research study by completing the following questionnaire. The questionnaire should take about 15 minutes of your time.

There is no compensation for responding nor is there any known risk. All responses will be analysed in order to provide data for my research dissertation. If you choose to participate in this project, please answer all questions as honestly as possible. Please be informed that your responses are voluntary and will be kept confidential. Responses are anonymous and cannot be identified by individual.

Please note that you can choose not to participate and that you are free to withdraw at any time without explanation and without incurring a disadvantage. In case you decide to withdraw before the completion of the questionnaire any incomplete form will be deleted and not used in the data analysis.

If you have any questions or concerns regarding your participation, please contact me: [email protected] or [email protected].

In case you are not satisfied with the manner in which this study is being conducted, you may report (anonymously if you so choose) any complaints to the research participant advocate at the University of Liverpool: 001-612-312-1210 (USA number) - email address: [email protected].

Again, I would like to thank you for your participation and for taking the time to assist me in my educational endeavours.

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mailto:[email protected]




Kind Regards, Alex Ribeiro

SHORT DESCRIPTION OF THE QUESTIONNAIRE

The aim of this dissertation is gather data to review and carry out a study of how acquired organizations are influenced by acquiring companies that result in their performance and culture behaviour improvement and imperfection before and after acquisition takes place. Integration is the main important phase which requires strategic and organizational conditioning factors that includes the culture acceptance and best management practices. Many factors can influence and improve the implementation and cultural integration. The organization of an early process plan, setting and communication of clear goals, arrangement of management with appropriate incentives to define the areas that can be achieved, keeping appropriate information between employees and customer, applying a quickly integration system with a sensitive culture change are many of these important factor.

The case will be most focused on the past and present experiences within different departments in Alstom Grid Switzerland, and the old and future acquisitions that influence the present organization. The questionnaire comprises topics such as mission and vision, business philosophy, and direction of organizational culture, extent of cooperation, communication system, motivation system, and freedom of expression of employees, reward and recognition programs of companies and their leadership practices

* Required

Part One

Personal Information

Please select the appropriate answers

Gender *

Male

Female

Age *

18 - 30

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31 - 35

36 - 40

41 - 45

46 - 50

51 and above

How long have your been working in the organization? *Please select the appropriate years you are working within the organization

1 - 3

4 - 8

9 - 12

13 - 20

21 and above

Part Two

General Questions

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1. In which area do you work at inside Alstom Grid? *

If your department is not listed below, please select others

a. Purchasing and Procurement

b. Finance

c. Tendering and Sales

d. Human Resource

e. Project Management and engineering

f. Services

g. Research and Development

h. Production, Assembling and Testing

i. Quality and Industrialization

j. Others

2. In what ways was your department affected by the past acquisitions? Please explain. *

3. Which level do you hold in your department? *

a. Management

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b. Ordinary employee

4. If you hold a management position, please select the level below. This question is not mandatory.

a. Top level management

b. Middle level management

c. Low level management

5. Was there any difference in culture between the acquired and acquisitor companies? *

a. Yes

b. No

6. How many acquisitions have you experience in your previous or actual organization? *

a. 1

b. 2

c. 3

d. 4

e. 5

7. If yes, which are the main cultural differences which you have identified between the acquired and acquisitor companies? Select as many options as you prefer.

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a. Values

b. Norms

c. Language

d. Practices

e. Beliefs

f. Behavior

g. Organizational Goals

8. Is there any way in which the differences identified have affected the performance of the acquisition? *

a. Yes

b. No

9. What is the nature of the relationship between the key cultural factors which improve mergers and acquisition? Please explain.

Part Three

The next following questions will measure your experience and feeling throughout the past acquisitions and expectance to which might become beneficial for a future acquisition.

For the 5 likert scale the options are defined as following:

1. Strongly Disagree, 2. Disagree, 3. Neither agree nor disagree, 4. Agree, 5. Strongly Agree

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1. How does merger and acquisition impact organizational culture? *

Positively

Neutrally

Negatively

Depends on the management

2. How does merger and acquisition impact employee morale? *

Increases

Decreases

No effect

Depends on management

3. Which is the major factor that affects selection of the company for merger or acquisition? *

Competitive environment

Profitability

Complementary resources

Organizational culture

4. The Merger or acquisition of Alstom with other companies was a good move from financial viewpoint *

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1 2 3 4 5

Strongly disagree

Strongly agree

5. The merger or acquisition of Alstom with other companies was a good move from competitive advantage. *

1 2 3 4 5

Strongly disagree

Strongly agree

6. Organizational culture was impacted after Alstom acquired with other companies *

1 2 3 4 5

Strongly disagree

Strongly agree

7. The most important aspect of merger or acquisition is the restructuring of organisation *

1 2 3 4 5

Strongly disagree

Strongly agree

8. The most important aspect of merger or acquisition is the employee morale and cultural change management *

1 2 3 4 5

Strongly disagree

Strongly agree

9. Mergers or acquisitions should be structured around complementary resources and capabilities of the merged or acquired organisations. *

1 2 3 4 5

Strongly disagree

Strongly agree

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10. It is beneficial to acquire ailing companies and turn them around for long term gains *

1 2 3 4 5

Strongly disagree

Strongly agree

11. The mergers of equals like ABB - Siemens (of same product portfolio) would be a bad example of merger and that should be avoided *

1 2 3 4 5

Strongly disagree

Strong agree

12. Employees and consumers suffer because of mergers and acquisitions *

1 2 3 4 5

Strongly disagree

Strongly agree

13. One of the major decision maker in the merger or acquisition should be channel partners. *

1 2 3 4 5

Strongly disagree

Strongly agree

14. The most long term work after merger or acquisition is the financial consolidation *

1 2 3 4 5

Strongly disagree

Strongly agree

15. The brand and brand elements should not be changes after merger or acquisition. *

1 2 3 4 5

Strongly disagree

Strongly agree

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16. The consumer trust and loyalty decreases after a company is acquired by a better company *

1 2 3 4 5

Strongly disagree

Strongly agree

17. Management should have a proactive communication plan for employees after Merging & Acquisitions *

1 2 3 4 5

Strongly disagree

Strongly agree

18. Organizational change and diagnosis should be done by professionals and it should be embedded in everyday functioning of organisation *

1 2 3 4 5

Strongly disagree

Strongly agree

19. Companies looking for acquisitions should have a clear objective to be achieved after acquisition and should refrain from ambiguous profitability analysis *

1 2 3 4 5

Strongly disagree

Strongly agree

20. I would support a Merging & Acquisition which is based on resource capability and internal strengths. *

1 2 3 4 5

Strongly disagree

Strongly agree

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Appendix 2Interview questions

1. How many merging and acquisitions have you experienced within Alstom?

2. What was the organizational structure before and after acquisition?

3. What is the organisation structure that is followed in your company and why do you think

that it is appropriate for your company?

4. What are the various factors that impact the selection of organizational culture of an

organisation for merger or acquisition?

5. To what extent do you feel the type of business and competitive forces impact the chosen

organizational ethics and culture for merger or acquisition?

6. How does the top leadership impact the organization’s culture and its impact on the

employees after merger or acquisition?

7. How do you ensure that your personal ethical and morals are in-line with the organizational

culture of an organisation for merger or acquisition?

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8. What are the steps and initiatives taken up by the organisation to induct employees from the

merged or acquired company into the culture of the organisation?

9. How do the growth and development plans of the organisation impact the organizational

change and cultural development?

10. What advice would you like to give to the new managers and leaders about the kind of

cultural framework they should follow after merger or acquisitions?

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